The unprecedented low-level of interest rates during the last decade has left some countries to spend. Now, with the disruption of the global economy from the COVID-19, the countries with high household debt is likely to be the ones that first fail to survive.
Below is an information on the household debt levels in OECD countries.
Weeks became months. It almost seems now that the situation will never end. The Korean government has been informing that the next two weeks will be the peak, but it sounds like a déjà vu from last week (Maybe they say two weeks to give the public some hope). Good news is that the number of cases has been declining recently.
Most people now wear masks at restaurants, cafes, and even when taking short stroll outside. It make you feel like a criminal to cough without covering your mouth and nose (maybe you are indeed, for spreading the virus). Our family also limited our outdoor activities, contact with neighbours or passerby, and casual dining outside.
How long the COVID-19 will hang in the air is very uncertain now. Just a few weeks ago, I read articles that some experts predict that the situation should be over by July, but recent news about the spread of virus in Europe and North America surely makes me doubt the prediction.
Anyway, the chart below clearly shows how vulnerable Korean market is to the movements in China and the U.S. markets.
When SHCOMP (Shanghai composite index) fell in mid-Jan, KOSPI, albeit in lesser magnitude, followed a similar pattern. KOSPI, SPX and SHCOMP then slowly recovered until Feb. 19th, when SPX began to plunge.
The stock market will eventually recover, maybe soon after the pandemic is over or maybe in a year or more. But just how much of that loss was funded by risky loans? It worries me that the total credit to households in Korea is already high (93.9% as a percentage of GDP, in Q3 2019). It’s only behind 7 countries (Australia, Canada, Denmark, Netherlands, Norway, Switzerland) out of 52 countries measured by the BIS.
From last mid-December to January 2020, I had been working with a group of experts to conduct a preliminary study on the energy efficiency market in Vietnam. The streets were booming with foreigners, reflecting the global interest in the country’s high economic potential, not least since the China and the U.S. trade war. This was different (as far as I can recall) from the impression that I received in 2014, when I first visited the country as a junior greenhouse gas researcher.
Below are some facts about Vietnam:
Vietnamese economy is expected to grow approximately at 6.5% per annum
Vietnam’s electricity generation is highly dependent on hydro (45%), coal (34%) and natural gas (20%) (Source: IEA)
The country became a net energy importer in 2015, primarily increased coal imports
Energy efficiency level is quite low, lots of potential to save energy use
Some other interesting facts (could be biased) that I heard/saw in Vietnam:
Streets are still overloaded with motor cycles fuming emissions
Solar power generation business was hot until recently, exploiting the government’s 20-year feed-in-tariff (FIT) scheme that ended in 2019. (The scheme was extended in Jan 2020)
Expect to have long delays in government administration processes as their admin system is still highly dependent on exchanging paper document
Though a communist country, the government seemed (at least to us) to abstain from intervening the market
Foreigners are not permitted to open a banking account, unless they reside in the country
Although organized very poorly, I hope posting this will allow me to slowly adapt a habit of writing. I will try to write more about Vietnam’s energy efficiency market in the next post.
If you find any wrong facts in the posting, please help me to fix it by leaving it in the comment section! Any other comments are welcomed.
It’s been a long time since I left a post on this personal blog. Since the time I left PwC, I have been assiduously preparing MBA applications (which requires a lot of time and effort) for submission. Meanwhile, I also pondered about how I should use this personal blog.
For now, I plan to write just about anything that interests me. But, I presume the topics will be mostly about global economics, finance, and business, especially on climate change and sustainability.
I wish to promote my blog as an online platform for any individuals (except people who just want to troll) to discuss global issues and find innovative solutions.
*As I am not a professional writer, analyst, reporter, etc., my opinions are limited within the knowledge and experience that I have garnered as an individual.
지난 3년간 몸 담았던 삼일회계법인(삼일PwC)을 떠나게 되었다. 이 곳에 다니면서 느끼고 배웠던 많은 일들은 앞으로 내가 살아가면서 필요한 긍정적인 마인드, 새로운 일에도 도전 할 수 있는 자신감, 그리고 Sustainability and Climate Change 분야에 대한 나의 생각을 더 확고하게 해주었다.
가족이 있는 상태에서 회사를 관두고 나간다는 것이 쉬운 결정은 아니었으나, 지금이 아니면 내가 하고 싶은 일들 도전 해 볼 수 없을 것 같다는 판단에 아내와의 상담 끝에 다시 사막과 같은 세상에 나아가 보기로 결정했다. 마음으로는 불안했을 수도 있지만 이 결정에 따라준 아내에게 고맙고, 앞으로 몇 달 간 또 새로이 달려보고자 한다. 나중에 이 글을 읽게 된다면, 이 때 옳은 결정을 했구나 하고 돌아 볼 수 있도록 열심히 노력할 것이다!